Prime Transaction: Transelectrica, Digi and Banca Transilvania - among the issuers with good results in the second quarter, from BVB

Transelectrica (TEL), a company that doubled its net profit in the second quarter, Digi Communications (DIGI), which also had a very large increase in profitability, and BRK Financial Group (BRK), which passed from big loss to profit, are among the issuers with the best results from the Bucharest Stock Exchange (BVB), in the April-June period, according to the analysis report of the Prime Transaction brokerage company, available in the attachment.

Also, Banca Transilvania (TLV) and Purcari Wineries (WINE) reported very good results, with important profit appreciations, the report signed by Marius Pandele also shows.

The negative results were concentrated in the area of state issuers, with Nuclearelectrica (SNN) reporting a large drop in profit, Transgaz (TGN) a fairly large increase in quarterly loss, while Romgaz (SNG) profit decreased but in a smaller proportion is also mentioned in the analysis.

• Transelectrica - doubling of quarterly net profit determined by a number of factors

The electricity carrier had a very good quarter, with a doubling of net profit, up to 160.3 million lei, the growth coming from several sources, say those from Prime.

The company's main revenues, those from the transport service, increased by 2.24%, up to 482.7 million lei, the increase coming exclusively from revenues from CPT transactions, with an increase of 32.99 million lei, while revenues from the transport service itself and those from the allocation of interconnection capacity decreased. Revenues from system services had a higher increase, of 92.79 million lei, the largest component of this category being technological system services, which fall under "zero profit" services, for which a positive result from today it is later offset by lower fares and vice versa, according to the report.

The increases in income from several sources led to a 71.5% increase in the operating result, up to 139.9 million lei, an evolution to which were added the positive influences from the net financial result, determined mainly by dividends collected from the OPCOM subsidiary and the profit tax.

"It is difficult to estimate what could happen in the second half of the year in the case of Transelectrica, the influence of so many factors can lead the results in any direction", the report states.

• Digi - another quarter with strong profit growth, albeit at a slightly lower level than in the first quarter

Digi Communications' profit margins continued to improve, again delivering a sizeable increase in quarterly net profit, according to Prime.

Revenues grew at a pace similar to the beginning of the year, reaching 472.8 million euros in the second quarter of 2024, respectively an appreciation of 14.1%, after having increased by 12.7% in the first quarter. The highest increase, of 22.5%, was registered in the case of the subsidiary's revenues in Spain.

Operating expenses grew at a slower pace, with only 11.27% to 338.8 million euros in the second quarter of 2024, which, however, was higher than the first quarter of 7.93%.

The group's operating profit increased by 29.7% on a quarterly basis, up to 54.27 million euros, while the net profit is double that of the same period last year, reaching 54.34 million euros.

"The market context is stable, so we can expect that in the second semester we will see an improvement in the results, especially since the financial result has also come out from under the pressure of the unfavorable conditions on the money market, as it was in the previous quarters ", according to the report.

• Banca Transilvania - high growth in revenues and profit, at a pace similar to that of the first quarter

The largest local bank continued its growth trend in the second quarter of the year, with both the income from the main activity and the profit having growth rates similar to those of the first quarter, Prime says.

Net interest income, the group's main source of income, increased by 22.9% in the second quarter to 1.58 billion lei, while net fee income increased by a smaller 12%. 39%, up to 358.32 million lei. Another positive contribution came from the profit tax, decreasing by 39.6 million lei, corresponding to a decrease in the effective tax rate, from 22.93% to 15.21% on a quarterly basis.

In the first six months, the net result increased by 35.7%, up to 2.15 billion lei, bringing the net result of the last twelve months higher, to 3.55 billion lei, by 18.91% above that of 2023.

"In the coming quarters we can expect even better results from Banca Transilvania, at least on the revenue side, where the revenues obtained from OTP Bank Romania, recently acquired, will also begin to be consolidated," according to the report.

• Nuclearelectrica - large decrease in quarterly profit, caused by the lower price of electricity

Nuclearelectrica's quarterly results were much weaker than in the same period of the previous year, with both the considerable drop in the average selling price of electricity and the lower amount of power sold during the quarter contributing to this, according to Prime.

Total revenues from the sale of electricity decreased by 46.9%, up to 852.86 million lei in the second quarter of 2024, a percentage decrease similar to that of the first quarter of the year (-44.47%). Most of the decrease came from the average selling price, which was lower by 41.96%, from 740 RON/MWh to 429.51 RON/MWh. The amount of power sold also fell by 8.48%, an atypical percentage for the nuclear power producer, as during the quarter there was an unplanned six-day shutdown at Unit 2, along with the planned shutdown of Unit 1 between May 19 and June 29, performed once every two years.

The net result decreased by 46.41%, up to 279.87 million lei, after in the first quarter the decrease was also lower, by 26.52% to be exact.

"The outlook is rather negative, the basic effect of the contribution to the energy transition fund will fade faster than that of the decrease in the price of electricity," the report states.

• Romgaz - decrease in profit caused by lower gas prices

The drop in the selling price of natural gas has led Romgaz's quarterly financial results to be lower than in the same period of the previous year, according to those from Prime.

The lower gas price was primarily seen in turnover, which decreased by 18.32% to 1.62 billion lei in the second quarter of 2024. The decrease is smaller than in the first quarter of the year (- 21.86%) and was caused almost entirely by the average sales price, while the quantities of recovered gases remained relatively constant.

On the other hand, the decrease in turnover was accompanied by increases in several categories of expenses, the largest of them in the case of fees and taxes, with an increase of 94.08 million lei (+30.89%) . For the second quarter of the year, Romgaz's net profit decreased by 17.29%, up to 591.89 million lei.

"Until now, Romgaz's results have been strongly influenced by the basic effects compared to the previous year on the fiscal side, but in the following quarters they will start to depend less and less on this element and more on the evolution of the gas price, which was in the last negative period. So, the all-time profit high may not be able to be improved at the end of 2024, however," according to the Prime Transaction report.